MIRA INFORM REPORT

Report Date :

21.11.2013

IDENTIFICATION DETAILS

Name :	LUVATA MALAYSIA SDN. BHD.
Formerly Known As :	OUTOKUMPU COPPER PRODUCTS (MALAYSIA) SDN BHD
Registered Office :	Suite 335a, 3rd floor, Johor Tower, Jalan Gereja, 80100 Johor Bahru, Johor
Country :	Malaysia
Financials (as on) :	31.12.2012
Date of Incorporation :	16.01.1997
Com. Reg. No.:	417125-K
Legal Form :	Private Limited
Line of Business :	Manufacturing and dealing of copper products
No. of Employees :	300

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
Malaysia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy''s dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 35% of government revenue in 2011. Bank Negera Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests

Source : CIA

* Adopted abbreviations :	SC - Subject Company (the company enquired by you)
	N/A - Not Applicable

EXECUTIVE SUMMARY

REGISTRATION NO.

:

417125-K

COMPANY NAME

:

LUVATA MALAYSIA SDN. BHD.

FORMER NAME

:

OUTOKUMPU COPPER PRODUCTS (MALAYSIA) SDN BHD (27/06/2006)

INCORPORATION DATE

:

16/01/1997

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 335A, 3RD FLOOR, JOHOR TOWER, JALAN GEREJA, 80100 JOHOR BAHRU, JOHOR, MALAYSIA.

BUSINESS ADDRESS

:

PLO 573, JALAN KELULI 10, KAWASAN PERINDUSTRIAN PASIR GUDANG, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

TEL.NO.

:

07-2526688

FAX.NO.

:

07-2521336

WEB SITE

:

WWW.LUVATA.COM

CONTACT PERSON

:

MICHAEL NORDGEN ( MANAGING DIRECTOR )

INDUSTRY CODE

:

25994

PRINCIPAL ACTIVITY

:

MANUFACTURING AND DEALING OF COPPER PRODUCTS

AUTHORISED CAPITAL

:

MYR 120,000,000.00 DIVIDED INTO
ORDINARY SHARE 20,000,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 100,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 120,000,000.00 DIVIDED INTO
ORDINARY SHARES 20,000,000 CASH OF MYR 1.00 EACH.
PREFERENCE SHARES 31,842,755 CASH AND 68,157,245 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 33,083,301 [2012]

NET WORTH

:

MYR 197,821,548 [2012]

M1000 OVERALL RANKING

:

648[2011]

M1000 INDUSTRY RANKING

:

9[2011]

STAFF STRENGTH

:

300 [2013]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The SC is principally engaged in the (as a / as an) manufacturing and dealing of copper products.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

According to the Malaysia 1000 publication, the SC's ranking are as follows:
YEAR	2011
OVERALL RANKING	648
INDUSTRY RANKING	9

The immediate holding company of the SC is LUVATA ESPOO OY, a company incorporated in FINLAND.

The ultimate holding company of the SC is LUVATA OY, a company incorporated in FINLAND.

The major shareholder(s) of the SC are shown as follows :

Name	Address	IC/PP/Loc No	Shareholding	(%)
LUVATA ESPOO OY	TUULIKUJA 2, FIN-02100, ESPOO, FINLAND.	FIXLZ00218330	120,000,000.00	100.00
			---------------	------
			120,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. ABDUL RAMAN BIN HAJI SAAD, HAJI
Address	:	NO. 42, JALAN JINGGA 4, TAMAN PELANGI, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.
New IC No	:	490402-04-5557
Date of Birth	:	02/04/1949
Nationality	:	MALAYSIAN
Date of Appointment	:	10/12/1997

DIRECTOR 2

Name Of Subject	:	PETER JOHAN FRIIS
Address	:	12A, JALAN TENGKU PETRIE 1, #07-19 CONDO PETRIE, 80200 JOHOR BAHRU, JOHOR, MALAYSIA.
IC / PP No	:	13632707
Date of Appointment	:	05/09/2000

DIRECTOR 3

Name Of Subject	:	MR. EAPEN ABRAHAM A/L K E ABRAHAM
Address	:	NO 10, JALAN LEMBAH 8, BANDAR SERI ALAM, 81750 MASAI, JOHOR, MALAYSIA.
New IC No	:	550404-01-5919
Date of Birth	:	04/04/1955
Nationality	:	MALAYSIAN
Date of Appointment	:	19/10/2011

DIRECTOR 4

Name Of Subject	:	BERNDT MICHAEL NORDGREN
Address	:	#B8-W2, BLOCK B, KONDOMINIUM STRAITS VIEW, JALAN PERMAS SELATAN, TAMAN PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.
IC / PP No	:	PX4214216
Date of Appointment	:	19/10/2011

DIRECTOR 5

Name Of Subject	:	MS. LAU SIEW DEE
Address	:	NO 9 JALAN JELITA 5, TAMAN PELANGI INDAH, 81800 ULU TIRAM, JOHOR, MALAYSIA.
New IC No	:	670313-01-5856
Date of Birth	:	13/03/1967
Nationality	:	MALAYSIAN
Date of Appointment	:	19/10/2011

MANAGEMENT

1)	Name of Subject	:	MICHAEL NORDGEN
	Position	:	MANAGING DIRECTOR

2)	Name of Subject	:	EAPEN ABRAHAM
	Position	:	ACCOUNTANT

3)	Name of Subject	:	SIA HENG HUAT
	Position	:	MARKETING MANAGER

4)	Name of Subject	:	GERALDINE LAU
	Position	:	HUMAN RESOURCE MANAGER

5)	Name of Subject	:	MOHAMED ARIFF
	Position	:	PRODUCTION MANAGER

AUDITOR

Auditor	:	KPMG
Auditor' Address	:	KPMG TOWER, 8 FIRST AVENUE, BANDAR UTAMA, LEVEL 10, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. CHONG SIOW PEI
	New IC No	:	790921-01-6322
	Address	:	26, JALAN TASEK SATU, TAMAN TASEK, 80200 JOHOR BAHRU, JOHOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

No encumbrance was found in our databank at the time of investigation.

LEGAL CHECK AGAINST SC

* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SC

* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES	Percentage	:	40%
Overseas	:	YES	Percentage	:	60%
Import Countries	:	ASIA

The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT
Prompt 0-30 Days	[	]	Good 31-60 Days	[	]	Average 61-90 Days	[	X	]
Fair 91-120 Days	[	]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES	Percentage	:	60%
Domestic Markets	:	MALAYSIA
Overseas	:	YES	Percentage	:	40%
Export Market	:	SINGAPORE AUSTRALIA NEW ZEALAND UNITED ARAB EMIRATES ASIA
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT) LETTER OF CREDIT (LC)
Type of Customer	:	AUTOMOTIVE INDUSTRIES,ELECTRICAL & ELECTRONIC INDUSTRIES,TELECOMUNICATION INDUSTRY

OPERATIONS

Products manufactured

:

COPPER PRODUCTS

Brand Name

:

AUTOKUMPU

Award

:

1 ) MS ISO 9001 : 2000 Year :2003

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

THE ELECTRICAL AND ELECTRONICS ASSOCIATION OF MALAYSIA (TEEAM)

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

Production Capacity

:

APPROXIMATELY 1,500 TONNES PER MONTH

Total Number of Employees:
YEAR	2013	2012	2011	2010	2009
GROUP	N/A	N/A	N/A	N/A	N/A
COMPANY	300	270	270	265	260

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacturing and dealing of copper products.

The SC is one of the copper product manufacturer for various industrial applications.

The SC produces a wide range of products including anodes, brass rod, profiles, rods & bars, sheets & plates, strips, tubes, welding products, wire and related products.

The SC produces its copper products according to its customers' requirements.

The SC's products are mainly used in various applications such as electrical and electronic conductivity, switch gears, electrical appliances, bus duct and etc.

The SC is specialises in custom designed plants for surface treatment of wire and strip as well as treatment of industrial waste water.

The SC provides its customers with service, maintenance and upgrading of both surface treatment and waste water treatment plants.

The SC's production machineries are semi-automated.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	072526688
Current Telephone Number	:	07-2526688
Match	:	YES
Address Provided by Client	:	PLO 573, JALAN KELULI 10, KAWASAN PERINDUSTRIAN PASIR GUDANG,81700,PASIR GUDANG,JOHOR.
Current Address	:	PLO 573, JALAN KELULI 10, KAWASAN PERINDUSTRIAN PASIR GUDANG, 81700 PASIR GUDANG, JOHOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

we contacted one of the staff from the SC and she provided some information on the SC

.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2008 - 2012	]
Profit/(Loss) Before Tax	:	Decreased	[	2008 - 2012	]
Return on Shareholder Funds	:	Unfavourable	[	6.46%	]
Return on Net Assets	:	Unfavourable	[	7.02%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The unfavourable return on shareholders' funds could indicate that the SC was inefficient in utilising its assets to generate returns.
Liquidity
Current Ratio	:	Favourable	[	1.72 Times	]
The SC was in good liquidity position with its current liabilities well covered by its current assets. With its net current assets, the SC should be able to repay its short term obligations.
Solvency
Liability Ratio	:	Favourable	[	0.73 Times	]
A low liabilities ratio has minimised the SC's financial risk.
Overall Assessment :
The SC recorded lower profits as its turnover showed a erratic trend. The SC's management was unable to control its costs efficiently as its profit showed a downward trend. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. The SC has a low liabilities ratio. It's liabilities were low and was not vulnerable to the financial risk.
Overall financial condition of the SC : STRONG

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2009	2010	2011	2012*	2013**
Population ( Million)	28.13	28.35	28.70	29.30	29.80
Gross Domestic Products ( % )	<0.5>	7.2	5.1	5.6	5.3
Domestic Demand ( % )	2.9	6.3	8.2	9.4	5.6
Private Expenditure ( % )	<2.7>	8.1	8.2	8.0	7.4
Consumption ( % )	0.7	6.7	7.1	1.0	5.7
Investment ( % )	<17.2>	17.7	12.2	11.7	13.3
Public Expenditure ( % )	5.2	3.8	8.4	13.3	1.2
Consumption ( % )	3.1	0.2	16.1	11.3	<1.2>
Investment ( % )	8.0	2.8	<0.3>	15.9	4.2
Balance of Trade ( MYR Million )	89,650	118,356	116,058	106,300	110,700
Government Finance ( MYR Million )	<28,450>	<40,482>	<45,511>	<42,297>	<39,993>
Government Finance to GDP / Fiscal Deficit ( % )	<4.8>	<5.6>	<5.4>	<4.5>	<4.0>
Inflation ( % Change in Composite CPI)	<5.2>	5.1	3.1	1.6	2.5
Unemployment Rate	4.5	3.9	3.3	3.2	3.0
Net International Reserves ( MYR Billion )	331	329	415	427	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	2.87	2.20	3.50	2.20	-
Average 3 Months of Non-performing Loans ( % )	11.08	15.30	14.80	14.70	-
Average Base Lending Rate ( % )	5.53	6.30	6.60	6.53	-
Business Loans Disbursed( % )	10.5	14.7	15.3	32.2	-
Foreign Investment ( MYR Million )	22,156.8	22,517.9	23,546.1	26,230.4	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	41,578	44,148	45,455	45,441	-
Registration of New Companies ( % )	<0.1>	6.2	3.0	<0.0>	-
Liquidation of Companies ( No. )	39,075	25,585	132,476	-	-
Liquidation of Companies ( % )	39.6	<34.5>	417.8	-	-
Registration of New Business ( No. )	312,581	271,414	284,598	324,761	-
Registration of New Business ( % )	-	-	-	-	-
Business Dissolved ( No. )	19,345	19,738	20,121	-	-
Business Dissolved ( % )	2.4	2.0	1.9	-	-
Sales of New Passenger Cars (' 000 Unit )	486.3	543.6	535.1	552.2	-
Cellular Phone Subscribers ( Million )	30.1	32.8	35.3	38.5	-
Tourist Arrival ( Million Persons )	23.6	24.6	24.7	25.0	-
Hotel Occupancy Rate ( % )	58.0	63.0	60.6	62.4	-
Credit Cards Spending ( % )	12.8	14.1	15.6	12.6	-
Bad Cheque Offenders (No.)	36,667	33,568	32,627	26,982	-
Individual Bankruptcy ( No.)	16,228	18,119	19,167	19,575	-
Individual Bankruptcy ( % )	16.7	11.7	5.8	2.1	-

INDUSTRIES ( % of Growth ):	2009	2010	2011	2012*	2013**
Agriculture	0.4	2.1	5.9	0.6	2.4
Palm Oil	<1.1>	<3.4>	10.8	<2.8>	-
Rubber	<19.8>	9.9	6.1	<0.6>	-
Forestry & Logging	<5.9>	<3.3>	<7.6>	<2.2>	-
Fishing	5.5	5.6	2.1	<0.7>	-
Other Agriculture	9.0	7.9	7.1	6.4	-
Industry Non-Performing Loans ( MYR Million )	413.7	508.4	634.1	-	-
% of Industry Non-Performing Loans	1.3	2.1	3.2	-	-
Mining	<3.8>	0.2	<5.7>	1.5	2.7
Oil & Gas	2.1	0.5	<1.7>	-	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	44.2	49.7	46.5	-	-
% of Industry Non-performing Loans	0.1	0.1	0.1	-	-
Manufacturing #	<9.4>	11.4	4.7	4.2	4.9
Exported-oriented Industries	<19.0>	12.1	2.8	4.1	-
Electrical & Electronics	<30.3>	28.4	<4.9>	1.6	-
Rubber Products	<10.1>	25.3	15.4	3.6	-
Wood Products	<24.1>	20.1	<4.9>	4.6	-
Textiles & Apparel	<19.5>	<0.4>	14.8	<7.1>	-
Domestic-oriented Industries	<9.8>	16.3	6.5	8.6	-
Food, Beverages & Tobacco	0.2	3.0	4.2	-	-
Chemical & Chemical Products	<7.7>	16.2	5.5	9.9	-
Plastic Products	<9.1>	2.4	3.8	-	-
Iron & Steel	<32.7>	29.3	2.4	-	-
Fabricated Metal Products	<2.5>	14.9	25.2	-	-
Non-metallic Mineral	<15.5>	20.2	27.1	6.6	-
Transport Equipment	<13.5>	36.5	<10.4>	13.7	-
Paper & Paper Products	<5.0>	18.7	14.8	<7.8>	-
Crude Oil Refineries	0.2	<11.4>	9.3	-	-
Industry Non-Performing Loans ( MYR Million )	6,007.3	6,217.5	6,537.2	-	-
% of Industry Non-Performing Loans	18.3	23.8	25.7	-	-
Construction	5.8	5.1	4.4	15.5	11.2
Industry Non-Performing Loans ( MYR Million )	3,241.8	4,038.5	3,856.9	-	-
% of Industry Non-Performing Loans	9.9	10.7	10.2	-	-
Services	2.6	6.5	6.4	5.5	5.6
Electric, Gas & Water	0.4	8.5	5.6	4.8	-
Transport, Storage & Communication	1.6	7.7	6.5	7.3	-
Wholesale, Retail, Hotel & Restaurant	2.8	4.7	5.2	6.9	-
Finance, Insurance & Real Estate	3.8	6.1	6.3	6.5	-
Government Services	2.0	6.7	7.6	5.6	-
Other Services	4.4	4.2	5.4	5.7	-
Industry Non-Performing Loans ( MYR Million )	6,631.3	7,384.6	6,825.2	-	-
% of Industry Non-Performing Loans	20.2	25.7	23.4	-	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index (Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY ANALYSIS

MSIC CODE
25994 : Manufacture of metal household articles
INDUSTRY :	MANUFACTURING
The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand.
Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.
According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion.
Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China.
Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.
The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.
Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such assolar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1997, the SC is a Private Limited company, focusing on manufacturing and dealing of copper products. With its long establishment in the market, the SC has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. The SC has strong capital position. We are confident with the SC's business and its future growth prospect.

Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. The SC is a fairly large and rapidly growing company with over 300 staff in its operations Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC. To improve its quality products and services, we noted that the SC has received a number of certifications & awards. This will improve the customer's confidence level to the SC.

The SC's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. A low liabilities ratio has minimised the SC's financial risk. Given a positive net worth standing at MYR 197,821,548, the SC should be able to maintain its business in the near terms.

The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.

Based on the above condition, we recommend credit be granted to the SC promptly.

PROFIT AND LOSS ACCOUNT

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

LUVATA MALAYSIA SDN. BHD.

Financial Year End	2012-12-31	2011-12-31	2010-12-31	2009-12-31	2008-12-31
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	SUMMARY	FULL	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	33,083,301	952,254,451	816,247,283	514,211,182	781,603,820
	----------------	----------------	----------------	----------------	----------------
Total Turnover	33,083,301	952,254,451	816,247,283	514,211,182	781,603,820
Costs of Goods Sold	-	<912,654,674>	<775,144,731>	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	-	39,599,777	41,102,552	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	13,883,659	15,818,018	23,256,081	51,507,277	<29,519,846>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	13,883,659	15,818,018	23,256,081	51,507,277	<29,519,846>
Taxation	<1,094,890>	<3,014,447>	<647,292>	<6,249,657>	6,779,708
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	12,788,769	12,803,571	22,608,789	45,257,620	<22,740,138>
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	65,032,779	52,229,208	29,620,419	<15,637,201>	7,102,937
	----------------	----------------	----------------	----------------	----------------
As restated	65,032,779	52,229,208	29,620,419	<15,637,201>	7,102,937
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	77,821,548	65,032,779	52,229,208	29,620,419	<15,637,201>
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	77,821,548	65,032,779	52,229,208	29,620,419	<15,637,201>
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	-	5,078,186	3,267,987	428,198	453,199
	----------------	----------------	----------------	----------------	----------------
	-	5,078,186	3,267,987	428,198	453,199

BALANCE SHEET

LUVATA MALAYSIA SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	93,950,746	107,271,587	92,031,745	84,106,338	75,220,243
LONG TERM INVESTMENTS/OTHER ASSETS
Deferred assets	-	2,209,000	5,267,000	5,891,000	12,136,000
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	2,209,000	5,267,000	5,891,000	12,136,000
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	93,950,746	109,480,587	97,298,745	89,997,338	87,356,243
CURRENT ASSETS
Stocks	-	69,284,298	30,476,211	37,453,921	20,458,804
Trade debtors	-	137,044,573	114,317,067	78,409,671	66,040,850
Other debtors, deposits & prepayments	-	1,091,412	811,655	1,133,048	1,009,862
Amount due from related companies	-	805,527	651,686	585,873	343,878
Cash & bank balances	-	24,300,933	13,762,800	12,639,511	16,805,027
Others	-	119,802	69,024	1,097	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	247,535,337	232,646,545	160,088,443	130,223,121	104,658,421
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	341,486,083	342,127,132	257,387,188	220,220,459	192,014,664
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	-	57,698,663	27,691,827	11,530,776	20,066,170
Other creditors & accruals	-	15,986,318	5,521,244	4,319,642	6,539,343
Short term borrowings/Term loans	-	15,230,400	-	-	-
Amounts owing to holding company	-	1,592,187	1,177,466	675,798	465,625
Amounts owing to related companies	-	479,286	432,065	273,235	827,036
Provision for taxation	-	-	-	-	40,146
Other liabilities	-	66,107,499	36,544,233	20,236,096	13,052
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	143,664,535	157,094,353	71,366,835	37,035,547	27,951,372
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	103,870,802	75,552,192	88,721,608	93,187,574	76,707,049
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	197,821,548	185,032,779	186,020,353	183,184,912	164,063,292
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	120,000,000	120,000,000	120,000,000	120,000,000	120,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	120,000,000	120,000,000	120,000,000	120,000,000	120,000,000
RESERVES
Retained profit/(loss) carried forward	77,821,548	65,032,779	52,229,208	29,620,419	<15,637,201>
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	77,821,548	65,032,779	52,229,208	29,620,419	<15,637,201>
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	197,821,548	185,032,779	172,229,208	149,620,419	104,362,799
LONG TERM LIABILITIES
Others	-	-	13,791,145	33,564,493	59,700,493
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	-	-	13,791,145	33,564,493	59,700,493
	----------------	----------------	----------------	----------------	----------------
	197,821,548	185,032,779	186,020,353	183,184,912	164,063,292
	=============	=============	=============	=============	=============

FINANCIAL RATIO

LUVATA MALAYSIA SDN. BHD.

TYPES OF FUNDS
Cash	-	24,300,933	13,762,800	12,639,511	16,805,027
Net Liquid Funds	-	24,300,933	13,762,800	12,639,511	16,805,027
Net Liquid Assets	103,870,802	6,267,894	58,245,397	55,733,653	56,248,245
Net Current Assets/(Liabilities)	103,870,802	75,552,192	88,721,608	93,187,574	76,707,049
Net Tangible Assets	197,821,548	185,032,779	186,020,353	183,184,912	164,063,292
Net Monetary Assets	103,870,802	6,267,894	44,454,252	22,169,160	<3,452,248>
BALANCE SHEET ITEMS
Total Borrowings	-	15,230,400	0	0	0
Total Liabilities	143,664,535	157,094,353	85,157,980	70,600,040	87,651,865
Total Assets	341,486,083	342,127,132	257,387,188	220,220,459	192,014,664
Net Assets	197,821,548	185,032,779	186,020,353	183,184,912	164,063,292
Net Assets Backing	197,821,548	185,032,779	172,229,208	149,620,419	104,362,799
Shareholders' Funds	197,821,548	185,032,779	172,229,208	149,620,419	104,362,799
Total Share Capital	120,000,000	120,000,000	120,000,000	120,000,000	120,000,000
Total Reserves	77,821,548	65,032,779	52,229,208	29,620,419	<15,637,201>
LIQUIDITY (Times)
Cash Ratio	-	0.15	0.19	0.34	0.60
Liquid Ratio	-	1.04	1.82	2.50	3.01
Current Ratio	1.72	1.48	2.24	3.52	3.74
WORKING CAPITAL CONTROL (Days)
Stock Ratio	-	27	14	27	10
Debtors Ratio	-	53	51	56	31
Creditors Ratio	-	23	13	8	9
SOLVENCY RATIOS (Times)
Gearing Ratio	-	0.08	0.00	0.00	0.00
Liabilities Ratio	0.73	0.85	0.49	0.47	0.84
Times Interest Earned Ratio	-	4.11	8.12	121.29	<64.14>
Assets Backing Ratio	1.65	1.54	1.55	1.53	1.37
PERFORMANCE RATIO (%)
Operating Profit Margin	41.97	1.66	2.85	10.02	<3.78>
Net Profit Margin	38.66	1.34	2.77	8.80	<2.91>
Return On Net Assets	7.02	11.29	14.26	28.35	<17.72>
Return On Capital Employed	7.02	11.29	14.26	28.35	<17.72>
Return On Shareholders' Funds/Equity	6.46	6.92	13.13	30.25	<21.79>
Dividend Pay Out Ratio (Times)	-	0.00	0.00	0.00	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	-	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.56
UK Pound	1	Rs.100.77
Euro	1	Rs.84.71

INFORMATION DETAILS

Report Prepared by :

NIS

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.